Wednesday, April 25, 2012

Janet Byrne has collected an impressive list of contributions for the Handbook of the Occupy movement. It is a 535 page book with chapters by the best progressive minds in the world. I read already a few of the contributions, like the one by Acemoglu and Robinson, or the interviews with Robert Shiller and Emmanuel Saez. There are not only economists, but also journalists and political scientists. But mostly it is progressive top economists that argue in favour of political and economic reforms that put income distribution at the top of the political agenda. The book not only gives arguments for the US occupiers, but also for the Spanish "indignados" or for the Chilean students. There are excellent economists from the US, Chile, France... From Spain, none. The only contribution from Spain is by a decent Catalan political scientist in the University of Salamanca (Castilla-León, in the north of Spain), Salvador Martí Puig. Where are the Spanish salt-water economists?

Sunday, April 15, 2012

In the recent past many economists have studied the role of happiness in explaining behavior and evaluating economic outcomes. Happiness is difficult to define, but seems to go beyond the concepts of individual welfare usually employed by traditional economists. It clearly helps to explain many phenomena. For example, the happiness that results from winning a lottery makes people more prone to vote for incumbent politicians, even though their wealth is clearly random and not the result of good policies. Or happiness explains why politicians are so prone to bid for organizing big sport events that are like enormous parties for local citizens. What this illustrates is that happiness is helpful from the point of view of positive economics: explaining why things happen. But it is less useful from the point of view of normative economics: what should happen. For the fact that people are happy with big sports events, for example, does not justify spending enormous amounts of money in something that just creates subjective happiness for a few days and leaves a legacy of high debts and white elephants.
We are all happy when our preferred soccer team wins a game, but this does not justify the numerous more or less implicit public subsidies that soccer clubs receive.

Monday, April 9, 2012

Potential authors of autobiographies should read "Youth" by JM Coetzee, before writing anything about their lives. The other two autobiographical books by Coetzee ("Boyhood" and "Summertime") are also excellent, but "Youth" is the best example I have ever read of a reflection on one-self that is as tough and demanding as an external examiner would be. Memories of one's past are usually self-indulgent, exercises in importing credit and exporting blame. Coetzee does the opposite, he does not avoid self criticism and an acid look at his past. In addition to that, he gives a vivid portrait of London in the 1960s. In part, it could be a description of parts of current London, like in his frequent visits to Charing Cross Road, the bookshops' street. Early political thoughts about Southafrica and the cold war also populate this amazing brief exhibition of great literature.

Thursday, April 5, 2012

Josep Borell has resigned as President of the European University Institute in Florence after his failure to declare to the High Council of the Institute that he was earning money as Director of a Spanish private sector firm in the alternative energy sector. I am told that the selection process was tough and competitive, and that he was mainly selected for his potential ability to raise funds for the Institute as a former President of the European Parliament.
Perhaps there is a fatidic trilemma between trying to be a politician, an academic and a company director at the same time. There are many cases of individuals choosing simultaneously two of these activities, but I know of no-one doing the three of them simultaneously. One can argue that Borrell is no longer a politician since he left the European Parliament after the past election. However, he has been active in political debate in Spain, regularly writing opinion articles in popular newspapers and endorsing a candidate in the recent Congress of the Spanish Socialist Party (the one that lost, Carme Chacón). Perhaps when the EUI’s High Council chose Borrell, they thought that his agitated political career was over. But actually before he was President of the European Parliament he already announced once that he was retiring from politics.
It is difficult to be at the same time active in politics and an academic, but clearly some individuals manage to do both, not without keeping a difficult and sometimes heroic balance. There are many doubts about the ethical condition (especially in the left) of those that perform a simultaneous role as company directors and as (retired? retiring?) politicians, but the practice is now widespread. But Borrell wanted to go beyond this, trying to be the three things at the same time.
One can see how the tendency of Borrell to voice his high profile opinions on many current economic issues would conflict with an Economics Department at the EUI that is focused on scientific economic research. One can also see how his role as director of a private sector energy company would cause a conflict of interests with the increasing role of the EUI in regulatory matters. For example, Borrell was scheduled to speak in the Palazzo Vecchio of Florence on May 10th on a major conference on European energy. Would he be free to speak his mind on the balance between public funds and the promotion of alternative energies?